FACTBOX-Indonesia LNG plants, projects

2009-07-0 0!0" #$TC%

&A'A(TA, &)l* #(e)ters% - Indonesia, t+e ,orld-s t+ird-.i//est li0)e1ied nat)ral /as
#LNG% e2porter, +as dispatc+ed its 1irst s+ip3ent 1ro3 Tan//)+ in 4ap)a, a project it
+opes ,ill o11set 1allin/ o)tp)t in ot+er a/ein/ 1ields5
T+e 1irst car/o 1ro3 B4-led Tan//)+ is d)e to /o to 4O6CO-s LNG ter3inal in
G,an/*an/, 6o)t+ 'orea, ener/* ,atc+do/ B47IGA6 said in a state3ent5
T+e /as ca3e 1ro3 Tan//)+-s 1irst LNG train, ,+ile t+e second train is e2pected to start
operatin/ t+is 0)arter, B47IGA6 said5
T+e /lo.al econo3ic crisis +as p)s+ed do,n LNG de3and aro)nd t+e ,orld and 3eans
t+at Indonesia, ,+ic+ is .e+ind 8atar and 7ala*sia as an e2porter, s+o)ld +a9e 3ore
a9aila.le to s)ppl*, partic)larl* ,it+ t+e Tan//)+ project co3in/ on strea35
In t+e past, &a:arta +as so3eti3es 1ailed to 3eet its contract)al co33it3ents to
traditional 3ar:ets s)c+ as &apan, 6o)t+ 'orea and Tai,an, o1ten a/reed 3ore t+an a
decade a/o, as it +as so)/+t to s,itc+ 3ore s)ppl* to t+e do3estic 3ar:et5
;ere is an o)tline o1 Indonesia-s LNG ind)str* and )pco3in/ /as projects!
Existing plants:
BONTANG - LNG prod)ction .e/an at t+e Bontan/ plant in <ast 'ali3antan in =9775
Bontan/, one o1 t+e lar/est plants in t+e ,orld, +as " trains and a capacit* o1 22 3illion
tonnes a *ear #tp*%, .)t o)tp)t +as declined d)e to a lac: o1 a9aila.le nat)ral /as5 >ico
Indonesia, jointl* o,ned .* B4, Ital*-s <ni , C+e9ron and Total, s)pplies /as to Bontan/5
T+e plant is e2pected to prod)ce a.o)t =752 3illion tonnes in 2009, do,n 1ro3 =757
3illion in 200"5
A($N - Indonesia also la)nc+ed LNG prod)ction at its Ar)n co3ple2 in Ace+ pro9ince
in =977, ,it+ trains and a capacit* o1 aro)nd =2 3illion tp*5 6ince 2000, LNG
prod)ction at Ar)n +as 1allen as nat)ral /as s)pplied .* <22on 7o.il declines5 Ar)n is
e2pected to prod)ce 25? 3illion tonnes o1 LNG in 2009, a.o)t t+e sa3e in 200"5
TANGG$; - T+e B4-led project is t+e co)ntr*-s t+ird LNG centre ,it+ a capacit* to
prod)ce 75 3illion tp* t+ro)/+ 2 trains5 Tan//)+ +as se9eral 1orei/n s)ppl* contracts,
incl)din/ a 25 3illion tp* contract ,it+ C+ina National O11s+ore Oil Corp #CNOOC%5
$565 1ir3 6e3pra <ner/* also +as a 20-*ear contract to li1t ?5 3illion tp* ,it+ t+e ri/+t
to di9ert +al1 to c)sto3ers ot+er t+an its o,n ter3inal in 7e2ico5 T+ere are also s)ppl*
contracts ,it+ 6o)t+ 'orean 1ir3s '-4o,er and 4O6CO5
4lanned projects!
'$TAI BA6IN - C+e9ron Corp is d)e to decide ,+et+er to 3o9e to 1inal desi/n on t+e
')tai Basin nat)ral /as project o11 <ast 'ali3antan .* t+e end o1 2009 and a 1inal
in9est3ent decision is li:el* in 20==5 T+e 7a:assar 6trait project ,o)ld +a9e t+e deepest
o11s+ore /as 1ields in Indonesia, at dept+s ran/in/ 1ro3 2,@00 to ,000 1eet #70-=,"00
3etres%5 C+e9ron +ad said it plans an in9est3ent o1 a.o)t A .illion in t+e 1ields, ,+ic+
+a9e co3.ined nat)ral /as reser9es esti3ated at o9er ? trillion c).ic 1eet #tc1%5
Indonesia-s ener/* 3inister said t+e project +ad a/reed to s)ppl* )p to 2@ percent o1 /as
to do3estic )sers, ,+ic+ co)ld pro9ide 057-05" 3illion tonnes o1 LNG a *ear5 6o3e o1
t+e /as 1ro3 ')tai ,ill also .e s)pplied to Bontan/5
7A6<LA - Indonesia is considerin/ .)ildin/ an ons+ore LNG plant 1or nat)ral /as
reser9es 1ro3 t+e Ti3or 6ea, ener/* 3inister 4)rno3o B)s/iantoro said5 &apan-s Inpe2
Corp, ,+ic+ is t+e operator o1 t+e A.adi 1ield in t+e 7asela .loc:, +ad earlier proposed
.)ildin/ a 1loatin/ LNG plant, ,+ic+ t+e oil ,atc+do/ +ad esti3ated ,o)ld cost A=95
.illion5 T+e 1ield is esti3ated to +a9e 3ore t+an =0 trillion c).ic 1eet o1 nat)ral /as
reser9es and is e2pected to .e on strea3 in 20=5
NAT$NA C-AL4;A - Indonesia-s state ener/* 1ir3 4erta3ina e2pects t+e Nat)na 6ea
nat)ral /as project to co3e onstrea3 in t+e ne2t "-9 *ears5 T+e Nat)na C-Alp+a .loc:,
,+ic+ +as a.o)t 222 trillion c).ic 1eet #tc1% o1 /as reser9es and ,ill re0)ire a.o)t AD0
.illion in9est3ent, is t+e s).ject o1 a disp)te .et,een <22on 7o.il and t+e /o9ern3ent5
Indonesia said last *ear it +ad a,arded 4erta3ina t+e operatin/ ri/+t, .)t <22on +as said
its contract is 9alid )ntil 20095 4erta3ina does not +a9e t+e tec+nical e2pertise or
1inancin/ to de9elop t+e project alone and +as na3ed ei/+t 1ir3s -- 4etronas, <22on
7o.il, C+e9ron, Total, (o*al C)tc+ 6+ell, 6tatoil;*dro, <ni and C+ina National
4etrole)3 Corp -- as potential partners5
CONGGI-6<NO(O - 4erta3ina, Indonesian ener/* 1ir3 7edco and &apan-s 7its).is+i
Corp5 +a9e a/reed to .)ild t+e A=5D .illion Con//i-6enoro LNG plant in 6)la,esi, ,it+ a
capacit* o1 2 3illion tonnes per *ear5 It ,ill recei9e nat)ral /as s)pplies 1ro3 4erta3ina
and 7edco5 T+e /o9ern3ent, 4erta3ina and 7edco are still in ne/otiations re9ie,in/ t+e
nat)ral /as price to t+e plant, ,+ic+ is e2pected to .e operational in 20=2 or 20=?5
+ttp!EE,,,52e5co3Ene,sE2009-07-0F2002!0"!0050E@?0?D@5+t3GcH?ItH=0"
Tangguh LNG
Tan//)+ LNG is t+e t+ird LNG +). in Indonesia5 In 7arc+ 200@ t+e Go9ern3ent o1
Indonesia /a9e t+e /o a+ead 1or t+e Tan//)+ LNG project in Bint)ni Ba* o1 Jest 4ap)a5
Ta:in/ its na3e 1ro3 t+e Indonesia ,ord 1or Kresilient and stron/K, Tan//)+ is centered
on t+e Bint)ni Ba* area o1 4ap)a, Indonesia - aro)nd se9en +o)rs 1li/+t 1ro3 &a:arta5
Jit+ ?75=F interest in t+e project, B4 Indonesia is t+e operator o1 Tan//)+ )nder a
prod)ction s+arin/ contract ,it+ B47IGA6 #Indonesia-s re/)lator* .od* 1or oil and /as
)pstrea3 acti9ities%5
In Octo.er 2007 t+e project co3pleted its planned loan a/ree3ent totalin/ $6A?5@ .illion
,it+ se9eral international .an:s to 1inance t+e de9elop3ent o1 t+e LNG plant5 T+e
e2ternal 1inancin/ +i/+li/+ts in9estors- con1idence in t+e project5
4roject location and di3ensions
T+e 4roject in9ol9es t+e tappin/ o1 si2 1ields to e2tract co3.ined pro9en reser9es o1
aro)nd =D5D trillion c).ic 1eet o1 clean /as5 T,o nor3all* )n3anned o11s+ore prod)ction
plat1or3s located in Bint)ni Ba* ,ill collect /as 1ro3 t+e reser9oir, t+en send it t+ro)/+
s).-sea pipelines to an LNG processin/ 1acilit* on t+e so)t+ s+ore5 Fro3 +ere, LNG ,ill
/o to ener/* 3ar:ets )sin/ LNG tan:ers5
<nlar/e i3a/e
d
T+e LNG processin/ plant ,ill initiall* consist o1 t,o LtrainsM #t+e )nits t+at p)ri1* and
li0)e1* /as%, prod)cin/ at least 75 3illion 3etric tons o1 LNG a *ear5 Ot+er 1acilities at
t+e site incl)des stora/e tan:s, an LNG tan:er loadin/ ter3inal, as ,ell as 3aintenance
1acilities, o11ices and a personnel acco33odation co3ple25
LNG sales and future expansion
T+e Tan//)+ LNG plant +as alread* sec)red lon/ ter3 LNG sales to 1o)r c)sto3ers5 It
,ill deli9er LNG to t+e F)jian LNG project in C+ina, '-4o,er Co5, Ltd in 'orea,
4O6CO in 'orea and 6e3pra <ner/* LNG 7ar:etin/ Corp5 in 7e2ico5 O9er ti3e, plant
capacit* 3a* .e e2panded to s)pport ne, sales co33it3ent5
Sustainable development
T+e Tan//)+ LNG 4roject pro9ides an inno9ati9e approac+ to s)staina.le de9elop3ent,
c)lt)ral preser9ation and .iodi9ersit* conser9ation5 Fro3 t+e o)tset, t+is +)/e
)nderta:in/ +as .een desi/ned and i3ple3ented ,it+ a n)3.er o1 :e* principles in
3ind! co33)nit*, partners+ip, cons)ltation and corporate responsi.ilit*5
+ttp!EE,,,5.p5co3Esection/enericarticle5doGcate/or*IdH900D779IcontentIdH700"7@9
INCON<6IA LNG 6NA46;OT
GLOBAL LNG APEC/GTI
Indonesia LNG Snapshot
Startup
Original Capacity Add-On
Capacity !"
#"
Total $or%ing
Original/
Add-On
Na&eplate
'TA"
$or%ing
'TA"
Na&eplate
'TA"
$or%ing
'TA"
Capacity
#((#
'TA" )"
Bontang*
1977
original/new trains:
1 2/1983;
2 1/1989;
3 1/1993;
4 1/1997;
5 1/2000
A-B 2 x 215 2 x 2 !0 "-# - 2 x
215
$-%- 2 x
230;
&-2!0
'- 300
17!
("-# 2 x
23;
$-%-2 x
25;
&-29)
'- 33*
+rains A-B
,e-ottlene.
/ to
32 ea.0
222
Aceh*
1978 3 original/new trains
1 2/1983-4
2 1/198!
3 x 150 3 x 170 3 x 150 1 1-3
#e-ottlene.
/ in.reases
ea.0 train to
29
14-!:
#e-ottlene.
/
in.reases
ea.0 train to
35
+rain
"los2res
4/2001:
12
3ot0-alle,
.2ts 29;
1!
3ot0-alle,
.2ts 350
128
TOTAL )+,(
#P -eser.es Production E/port"
Gas
TC0" 1"
Condensate
&illion BBLS" +"
Gas
&illion
C0/day" 2"
Condensate
'B3" 4"
'a5or
Production
0ields 6"
4ational: 1341
Bontang: 248
Ar2n: 5!
!20
345
30
!)804
2)841
!94;
(3)381*
108
78
12
(54*
Bontang:
5anga 5anga)
677s0ore
8a0a/a3)
$ast
9ali3antan
:5"s (in.l2,es
Ba,a/) 4ila3)
+2n2)
+a3-ora) 5isi)
42-i) 4;
:e.i/o)
5e3anl2 gas
7iel,s an,
asso.iate, gas
7ro3 'an,il)
Atta/a)
Be/a<ai*;
Ar2n: 4ort0
523atra =B=
Blo./ (single)
giant gas 7iel,*)
456 Blo./
(A) >1) >2 gas
7iel,s*
Initial Cost ?o2g0l@ A12-15 -illion ea.0 7or
Bontang an, A.e0 on two trains
an, t0ree trains) res<e.tiBel@
%2rt0er C4& inBest3ent sin.e
1980 3ore t0an A10 -illion
O7nership 8pstrea& Bontang s2<<lie, -@ 677s0ore
8a0a/a3 :5" (50D +otal) 50D
En<ex*) 5anga 5anga :5"
(2313D Fi.o) 2!25D $4E (ex-
Cas3o*) 2!25D B:) 20D ":"
+aiwan) 437D GniBerse &as an,
6il (6sa/a &as* an, $ast
9ali3antan :5" (100D Gno.al*
A.e0 100D $xxon8o-il 4ort0
523atra :5" (o7 w0i.0
:erta3ina ta/es 70D o7 o2t<2t*
O7nership 3o7nstrea& 9" :+ Ba,a/ 4&C "o at Bontang
(55D :erta3ina) 20D Fi.o) 15D
>a<an En,onesia C4& "o*; :+
Ar2n 4&C "o at A.e0 (55D
:erta3ina) 30D $xxon8o-il an,
15D >a<an En,onesia C4& "o
CONT:3 NE;T PAGE
+ttp!EE,,,5apeccons)ltin/5co3E4CFEJe.IndonLNG6naps+ot5pd1
Indonesia plans Floatin/ LNG ter3inal in N5 6)3atra
T)e, 7ar ?=, 2009 N Ne,s

Indonesia plans LNG 1loatin/ recei9in/ ter3inal in N5 6)3atra

&A'A(TA, 7arc+ ?0 #(e)ters% - Indonesia plans to .)ild a li0)e1ied nat)ral /as #LNG%
1loatin/ recei9in/ ter3inal in Nort+ 6)3atra to sec)re nat)ral /as s)pplies 1or a po,er
plant in t+e area, t+e 3ines and ener/* 3inister said on 7onda*5
Indonesia is see:in/ alternati9e so)rces o1 ener/* s)c+ as nat)ral /as and coal to 3eet
risin/ do3estic de3and 1or po,er and to red)ce cons)3ption o1 cr)de oil as its reser9es
d,indle5 T+e ne, LNG ter3inal ,o)ld s)ppl* state electricit* 1ir3 4T 4er)sa+aan
Listri: Ne/ara #4LN%5

As t+e ,orldMs n)3.er t+ree LNG e2porter a1ter 8atar and 7ala*sia, it +as in t+e past
1ailed to 3eet its contract)al co33it3ents to traditional 3ar:ets s)c+ as &apan, 6o)t+
'orea and Tai,an, o1ten a/reed 3ore t+an a decade a/o, as it see:s to s,itc+ 3ore
s)ppl* to t+e do3estic 3ar:et5
L4LN .adl* needs 3ore /as s)ppl* 1or its po,er plant in Nort+ 6)3atra5 Je ,ill
anticipate .* .)ildin/ an LNG 1loatin/ recei9in/ ter3inal t+ere,M 4)rno3o B)s/iantoro
told reporters5
B)s/iantoro said +e +as as:ed state /as 1ir3, 4T 4er)sa+aan Gas Ne/ara T.: #4GN%, to
.)ild t+e ter3inal5
4GNMs president director ;endi 4rio 6antoso said t+e ter3inal is e2pected to +a9e a
capacit* o1 aro)nd =@0 3illion c).ic 1eet o1 /as per da*5 ;e did not /i9e a 1i/)re 1or t+e
in9est3ent re0)ired5
LB)ildin/ 1loatin/ LNG recei9in/ ter3inal is 0)ic:er co3pared ,it+ /as pipeline5 Je
,ill tal: to B47IGA6 to see +o, ,e ,ill /et t+e LNG 1or t+is ter3inal,M 6antoso said5
+ttp!EE,,,5ln/pedia5co3Eindonesia-plans-ln/-1loatin/-recei9in/-ter3inal-in-n-s)3atraE
Indonesia-s LNG ter3inal 1aces dela*s
B* $pstrea3 sta11
T+e constr)ction o1 Indonesia-s 1irst li0)i1ied nat)ral /as recei9in/ ter3inal 3a* .e
dela*ed .* 1)ndin/ ,oes and di11erences o9er plant speci1ications, a senior o11icial o1
state po,er co3pan* 4T 4er)sa+aan Listri: Ne/ara #4LN% said toda*5
A consorti)3 o1 4LN, 4T 4er)sa+aan Gas Ne/ara #4GN% and state oil co3pan*
4erta3ina initiall* planned to .)ild t+e ?-3illion-tonnes per *ear LNG recei9in/ ter3inal
,+ose constr)ction ,as e2pected to .e co3pleted in 20=2 or 20=?5
A 4GN o11icial +as .een pre9io)sl* 0)oted .* t+e Bisnis Indonesia dail* as sa*in/ t+e
alternati9es ,ere to .)ild a 3ini ter3inal ,it+ an ann)al capacit* o1 =5@ 3illion tonnes or
a 1loatin/ ter3inal ,it+ capacit* o1 = 3illion tonnes a *ear5
4LN needs t+e LNG recei9in/ ter3inal to sec)re /as s)ppl* 1or its /as-1ired po,er
plants, especiall* on t+e island o1 &a9a5
Indonesia, no, t+e ,orld-s n)3.er-t+ree LNG e2porter a1ter 8atar and 7ala*sia, is
.oostin/ )se o1 ener/* so)rces s)c+ as nat)ral /as to red)ce oil )se .eca)se o1 +i/+
prices and d,indlin/ do3estic s)ppl*5
K4LN ,ant t+e consorti)3 to stic: ,it+ t+e ori/inal plan to .)ild t+e LNG ter3inal on
land in Jest &a9a,K (e)ters 0)oted Fa+3i 7oc+tar, t+e co3pan*-s president director, as
tellin/ reporters5
KI1 t+e consorti)3 c+an/es t+e ori/inal plan t+en 4LN ,ill not join t+e project5K
Indonesia-s Bontan/ LNG plant, in <ast 'ali3antan, +as pled/ed to s)ppl* t+e do3estic
LNG recei9in/ ter3inal ,it+ =5@ 3illion tonnes ann)all*5
Indonesia is also set to s)ppl* so3e o1 t+e LNG 1ro3 its Tan//)+ plant in 4ap)a to t+e
do3estic 3ar:et5 Indonesia is co)ntin/ on B4-led Tan//)+ to +elp o11set declinin/
prod)ction at older projects5
It +as 1ar 3ore /as t+an oil .)t +as li3ited s)pplies 1or its o,n )se d)e to lon/-ter3 LNG
e2port co33it3ents, ,+ic+ it is re9ie,in/5
Jednesda*, =7 Cece3.er, 200", =0!?? G7T N last )pdated! Jednesda*, =7 Cece3.er,
200", =0!DD G7T
+ttp!EE,,,5)pstrea3online5co3Eli9eEarticle="?9@5ece
ENERGY NEWS
IN3ONESIA* T-O8BLES IN IN3ONESIA:S LNG IN38ST-<
Su&&ary:
#e.lining <ro,2.tion an, t0e &6Es >an2ar@ 2005 ,e.ision to ,e7er an, .an.el 51 liH2e7ie,
nat2ral gas (C4&* .argos t0is @ear are t0e 3ost Bisi-le signs o7 tro2-le in En,onesias C4&
in,2str@
C4& <ro,2.ers an, -2@ers are .on.erne, t0at <oor <oli.@ an, wea/ goBern3ent
3anage3ent t0reaten En,onesias .o3<etitiBeness
:rotra.te, negotiations -etween t0e &6E an, a B: .onsorti23 to ,eBelo< a t0ir, C4& .enter
at +angg20 will ,ela@ new C4& <ro,2.tion 2ntil 2008
#es<ite a-2n,ant nat2ral gas reserBes) En,onesia will Ber@ li/el@ .ontin2e to lose worl, 3ar/et
s0are an, C4& reBen2e
+0e in,2str@ wants t0e &6E to strengt0en C4& goBernan.e an, reBise
or .lari7@ /e@ reg2lations to i3<roBe t0e 0ealt0 o7 t0e se.tor

#ownloa, t0is ,o.23ent in :#% 7ile

Bac%ground
En,onesia -egan C4& <ro,2.tion in 1977 an, is t0e worl,s 7irst an, largest C4& <ro,2.er
62t<2t ,ro<<e, -@ 35 <er.ent in 2004 to a-o2t 255 3illion tons (8+*) ,own 7ro3 a <ea/ o7 289
3illion tons in 1999 +0e .o2ntr@ 0as two C4& .enters :+ Ar2n in A.e0 <roBin.e an, :+ Ba,a/
at Bontang in $ast 9ali3antan <roBin.e $xxon8o-il ($8* <roBi,es ons0ore an, o77s0ore nat2ral
gas 7or C4& at Ar2n) a six-train 7a.ilit@ wit0 a <ro,2.tion .a<a.it@ o7 128 3illion tons <er ann23
(3t<a* %ren.0 +otal) Anglo-Etalian Ioint Bent2re FE"6 En,onesia an, G5 Gno.al <roBi,e nat2ral
gas 7ro3 ons0ore an, o77s0ore 7iel,s 7or C4& <ro,2.tion at t0e :+ Ba,a/ <lant in Bontang) an
eig0t-train 7a.ilit@ wit0 a <ro,2.tion .a<a.it@ o7 21!3 3t<a A t0ir, (two-train) 7 3t<a* C4&
<ro,2.tion .enter at +angg20 in ;est :a<2a) o<erate, -@ Anglo-A3eri.an B:) wit0 signi7i.ant
"0inese an, >a<anese s0are0ol,ings) s0o2l, .o3e on line in 2008

C4& .ontri-2tes s2-stantiall@ to t0e En,onesian e.ono3@ En t0e 1990s) oil an, gas reBen2es) o7
w0i.0 C4& re<resents a-o2t 0al7) .o3<rise, nearl@ 27 <er.ent o7 t0e .o2ntr@s ,o3esti. -2,get
reBen2es +o,a@) t0at n23-er re3ains oBer 23 <er.ent En 2004) 0ig0 .r2,e oil <ri.es 0el<e,
raise C4& ex<orts to a re.or, A77 -illion) 11 <er.ent o7 En,onesias A!97 -illion in total ex<orts
En,onesias C4& -2@ers in.l2,e >a<an (71 <er.ent s0are*) 5o2t0 9orea (20 <er.ent*) an, +aiwan
(9 <er.ent* Beginning in 2007) En,onesia is .ontra.te, to s0i< C4& to t0e "0inese 4ational
677s0ore 6il "or<orations ("466"* <lanne, %2Iian ter3inal in "0ina) G5 5e3<ra $nerg@s
<ro<ose, BaIa "ali7ornia ter3inal) an, 5o2t0 9oreas 59-:65"6 En,onesia .ontin2es to 0aBe
t0e -est 0@,ro.ar-on <otential in 5o2t0east Asia) wit0 a re<2te, 178 trillion .2-i. 7eet (+"%* o7
<roBen an, <ro-a-le gas reserBes
Indonesian LNG Statistics
<ear =olu&e 'T"
-e.enues
>illion 8S" ? G3P
$orld 'ar%et
Share
1998 2!912 3389 34 32D
1999 28955 4489 32 32D
2000 2!991 !802 44 2!D
2001 23882J 5375 38 22D
2002 2!225 5595 32 23D
2003 2!404 !58! 31 21D
2004 25504 77!7 31 n/a
JAr2n <ro,2.tion s02t ,own 7or 7o2r 3ont0s 7or se.2rit@ reasons (see -elow*
Arun LNG Challenges
A.e0s gas <ro,2.tion <ea/e, in 1995 an, is now on a stea,@ ,e.line +0ree C4& trains are
.2rrentl@ 2se,) <ro,2.ing a-o2t ! 3t<a 5eBeral 7a.tors a77e.t C4& <ro,2.tion at Ar2n:
- 3eclining reser.es: 90 <er.ent o7 Ar2ns gas reso2r.es are now ,e<lete, an, .o33itte,
reserBes will r2n o2t entirel@ in 2018 +0e Blo./ A gas 7iel, in 4ort0 A.e0 re3ains
2n,eBelo<e, <en,ing an agree3ent -etween o<erator "ono.o:0illi<s) <artner $xxon8o-il
an, t0e &6E on reBen2e s0aring ter3s
- Security: in 2001) :+ Ar2n .lose, ,own nat2ral gas <ro,2.tion 7or 7o2r 3ont0s w0en .las0es
-etween t0e 3ilitar@ an, A.e0nese se<aratists t0reatene, wor/er sa7et@ +0e s02t,own
0alBe, Ar2ns <ro,2.tion t0at @ear an, 3ar/e, t0e 7irst ,isr2<tion o7 En,onesian C4& to its
-2@ers
- 0ertili@er plants: t0e &6E reH2ire3ent to <roBi,e low-.ost nat2ral gas to national 7ertiliKer
<lants 0as re,2.e, C4& <ro,2.tion an, .a2se, state-owne, :erta3ina (w0i.0 o<erates
Ar2n* to ,e7er ! .argoes to >a<anese an, 9orean -2@ers 7ro3 2004 to 2008 +0e &6E
.onBin.e, -2@ers to ,e7er an a,,itional 9 .argoes 7or 2005
Bontang LNG Challenges
Bontang .2rrentl@ <ro,2.es a-o2t 20 3t<a o7 C4& Et -egan ex<erien.ing C4& s0ort7alls in 2004)
.a2sing t0e &6E to as/ its >a<anese -2@ers to .an.el 41 C4& .argoes 7or 2005 8aintaining
Bontangs <ro,2.tion 0as its own set o7 .0allenges:
- Gas supply pro>le&s: t0e t0ree gas <roBi,ers (+otal) FE"6 an, Gno.al* 0aBe ex<erien.e,
2n,er<ro,2.tion or in.onsistent <ro,2.tion ,2e to 3aintenan.e) a..i,ent or low 7iel,
<er7or3an.e
- Lac% oA in.est&ent incenti.es: Bontangs C4& sales .ontra.ts 0aBe no <enalties 7or non-
<er7or3an.e; ie) t0e <ro,2.ers -ear no a,,itional .ost to t0e -2@ers 7or 7ailing to 3eet
.ontra.t o-ligations L2estions oBer w0o is res<onsi-le 7or 3aintenan.e an, re<air at t0e
aging :+ Ba,a/ 7a.ilit@) as well as <otential 72t2re .0arges -@ its o<erator :erta3ina) 0aBe
slowe, inBest3ent in t0e 7a.ilit@
- 0ertili@er plants: ,es<ite C4& s0ort7alls) t0e &6E ,iBerts gas 7ro3 Bontangs <ro,2.ers so
t0at :erta3ina .an sell s2-si,iKe, gas to a national 7ertiliKer <lant gro2< an, two s3all
>a<anese-owne, <lants
0ertili@er Policy Costs Indonesia
+0e .ost o7 t0e &6E <oli.@ to s2<<ort t0e national 7ertiliKer in,2str@ is 0ig0 Ar2ns six-.argo
,e7er3ent last @ear .ost En,onesia a-o2t A130 3illion in C4& reBen2es) o7 w0i.0 A.e0 <roBin.e
wo2l, 0aBe re.eiBe, a<<roxi3atel@ 0al7 (4ote: 2n,er 5<e.ial A2tono3@) A.e0 re.eiBes 70
<er.ent o7 t0e &6Es 70 <er.ent gas s0are* +0e 9 .argo ,e7erral 7or 2005 will .ost t0e .o2ntr@
a-o2t A180 3illion +0e &6E wants Ar2n to s2<<l@ gas instea, to two A.e0 7ertiliKer <lants at a
s2-si,iKe, <ri.e o7 A230/33-t2) a-o2t one-t0ir, its C4& Bal2e +0e .o3-ine, e77e.t o7 ,e.lining
<ro,2.tion an, s2<<ort to t0e 7ertiliKer in,2str@ .o2l, lea, En,onesia to ,e7er) or s<ot <2r.0ase)
as 3an@ as 14 Ar2n .argoes in 200! an, 28 Ar2n .argoes in 2007
At Bontang) t0e .osts o7 &6E s2<<ort to t0e 7ertiliKer in,2str@ are eBen 0ig0er Alt0o2g0 t0ere is
no gas s2<<l@ agree3ent -etween :erta3ina an, t0e <etrole23 .o3<anies (Gno.al) +otal an,
FE"6*) it ,iBerts 400-450 33.7, o7 gas 7ro3 C4& <ro,2.tion 7or sale to t0e 7ertiliKer in,2str@
+0at gas Bol23e is t0e eH2iBalent o7 40-45 C4& .argoes) or t0e sa3e n23-er o7 Bontang
.argoes t0at En,onesia will .an.el to its Asian -2@ers t0is @ear +0e Bal2e o7 t0e .an.elle,
.argoes is esti3ate, at A800-900 3illion) o7 w0i.0 t0e &6E wo2l, 0aBe nette, 0al7 Enstea,)
:erta3ina will 2se t0e gas ,o3esti.all@ to t0e 7ertiliKer in,2str@ 7or 2n,er t0an A250/33-t2) less
t0an 0al7 t0e aBerage Bontang C4& .ontra.t <ri.e
+0ere are seBeral ex<lanations 7or t0e &6Es s2<<ort to t0e 7ertiliKer in,2str@ 6ne reason is t0e
i3<ortan.e t0e goBern3ent <la.es on ens2ring s277i.ient 7ertiliKer 7or t0e .o2ntr@s large
agri.2lt2ral se.tor Anot0er reason is Io-s ea.0 state-owne, 7ertiliKer <lant e3<lo@s oBer 1000
<eo<le 5/e<ti.s won,er i7 t0ese state-owne, <lants also <roBi,e rent-see/ing o<<ort2nities
LNG 'anage&ent* Too 'any Coo%s
A <ri3ar@ 7a.tor 02rting En,onesias C4& 72t2re ,eBelo<3ent is wea/ goBern3ent 3anage3ent
oBer t0e se.tor :rior to 2002) :erta3ina was t0e &6Es single .oor,inator 7or C4& 3anage3ent)
<ro,2.tion) sales an, 3ar/eting ;it0 t0e M2n-2n,lingN o7 t0e se.tor 2n,er t0e 2001 6il an, &as
Caw an, t0e .reation o7 2<strea3 a2t0orit@ B:8E&A5 in 2002) t0ere are now seBeral entities
inBolBe, in C4& goBernan.e t0e $nerg@ 8inistr@) t0e %inan.e 8inistr@) :erta3ina) an,
B:8E&A5 +0is 0as raise, a n23-er o7 H2estions) in.l2,ing w0i.0 <arties 0aBe .ontrol oBer
C4& assets) w0i.0 <arties are a2t0oriKe, to negotiate an, sell 72t2re C4& .ontra.ts) an, w0at
0a<<ens to :erta3inas existing 7inan.ial an, .ontra.t2al C4& o-ligations
+0is a3-ig2o2s arrange3ent 3a/es it ,i77i.2lt 7or t0e &6E to oBersee ,e.isions t0at a77e.t t0e
oBerall 0ealt0 o7 t0e C4& in,2str@ En 2001) >a<ans M;estern B2@ersN (t0e gro2< o7 .o3<anies
originall@ .ontra.te, to <2r.0ase C4& 7ro3 Ar2n in ;estern En,onesia* negotiate, a lower <ri.e
wit0 :erta3ina 7or t0e Ar2n EE .ontra.t extension +0at <ro3<te, >a<ans M$astern B2@ersN
(.o3<anies -2@ing C4& 7ro3 Bontang in $astern En,onesia* to inBo/e t0e M7air an, eH2ita-le
tra,eN .la2se in its Bontang .ontra.t +0is 7or.e, Gno.al) FE"6 an, +otal to tie t0eir C4&
.ontra.t <ri.e to a .r2,e oil <ri.e .eiling o7 A24/-arrel +o ,ate) t0ese a.tions 0aBe .ost En,onesia
an, t0e Bontang s2<<liers A700 3illion -etween 2002-2004 an, an esti3ate, A200 3illion in
2005
5i3ilarl@ in 2002) Ar2n an, Bontang <ro,2.ers .o3<laine, t0at t0e low C4& <ri.e negotiate, -@
B:8E&A5) B: an, "0ina 7or t0e %2Iian C4& sales .ontra.t 2n,er.2t t0e long-ter3 Bia-ilit@ o7
En,onesias 0ig0er-<ri.e,) existing C4& .ontra.ts MEt was li/e t0e 3 3illion ton tail wagging t0e 27
3illion ton ,og)N .o3<laine, one exe.2tiBe) re7erring to t0e Bol23e ,i77eren.e -etween t0e %2Iian
an, existing C4& .ontra.ts +0e .2rrent a3alga3 o7 C4& sellers is 2nli/el@ to i3<roBe soon
:erta3ina is re<orte,l@ not eager to <la@ a s2-or,inate role to B:8E&A5 an, 0as .arBe, o2t
a2t0orit@ to re3ain t0e goBern3ents negotiator an, seller o7 re.or, 7or >a<ans C4&
.ontra.ts
+0e +angg20 <roIe.t is a goo, exa3<le o7 0ow t0ese <ro-le3s .on.ern -2@ers an, ,ela@
En,onesias 72t2re C4& ,eBelo<3ent #es<ite t0e 7a.t t0at +angg20 stra,,les a large 14 +"% gas
reso2r.e ,2ring a <erio, o7 growing ,e3an,) it too/ oBer two @ears to 7in, eno2g0 C4& -2@ers to
3a/e t0e <roIe.t Bia-le Et too/ t0e &6E oBer t0ree @ears to iss2e i3<le3enting reg2lations t0at
wo2l, <er3it B: to see/ +angg20 .ontra.t area extensions .oBering t0e li7es<an o7 its C4&
.o33it3ents %or ,ela@s ens2re, w0en t0e B: .onsorti23) w0i.0 is also t0e &6Es seller o7
re.or, 7or +angg20 C4&) as/e, t0e &6E sign a s0are, lia-ilit@ agree3ent to <rote.t t0e <roIe.t
against 72t2re &6E ,e.isions 0ar372l to t0e C4& in,2str@
AAter TangguhB $hatC
As in,2str@ <ress .asts a ros@ glow oBer C4& <ro,2.tion growt0 7or .o3<etitors s2.0 as Latar)
?2ssia) 8ala@sia an, A2stralia) En,onesia 0as 7ew signi7i.ant C4& ,eBelo<3ent <roIe.ts on t0e
0oriKon Gno.als &en,alo ,ee<water gas <roIe.t in o77s0ore 9ali3antan .o2l, .o3e online in
2010) -2t t0is wo2l, onl@ 3aintain Bontangs C4& <ro,2.tion :erta3ina o..2<ies <otentiall@
large gas tra.ts s2ita-le 7or C4& ,eBelo<3ent) s2.0 as #onggi in 5o2t0 52lawesi) -2t la./s t0e
3one@ to ex<lore an, ,eBelo< t0e3 alone %oreign .o3<anies are intereste, in Ioint Bent2res)
-2t nee, .larit@ on C4& 3anage3ent an, reg2lations i3<osing new taxes an, ,o3esti. 3ar/et
o-ligations 7or nat2ral gas As a res2lt) o2tsi,e o7 +angg20s !3 3t<a .o33it3ents) En,onesias
.ontra.te, C4& Bol23es will not grow t0is ,e.a,e:
LNG Contracts in &illion oA &etric tons"
I&porter #((1 #((+ #((2 #((4 #((6 #((9 #(!(
>a<an 1818 15!3 15!3 15!3 15!3 15!3 15!3
59orea 53 !35 405 405 405 405 405
+aiwan 342 342 342 342 342 342 184
"0ina 0 0 0 2! 2! 2! 2!
G5 0 0 0 37 37 37 37
TOTAL #2,9 #+,1 #),! #9,1 #9,1 #9,1 #4,6#
-e&edial Action Needed
En,2str@ asso.iations 0aBe o2tline, to t0e &6E a n23-er o7 ste<s t0at wo2l, i3<roBe t0e 0ealt0 o7
t0e C4& se.tor:
Strengthen LNG Go.ernance $sta-lis0 .lear lines o7 a2t0orit@
regar,ing C4& assets an, 3anage3ent 4egotiate 72t2re sales .ontra.ts wit0 one
Boi.e an, wit0 regar, to t0e e77e.t on existing .ontra.ts
-e&o.e Constraints on LNG Gro7th ?eBise or .lari7@ laws an, reg2lations
t0at 02rt t0e e.ono3i.s o7 C4& ,eBelo<3ent an, in0i-it new inBest3ent) s2.0 as
,o3esti. 3ar/et o-ligations an, <ro<ose, taxes ,2ring ex<loration
-ationali@e Policy&a%ing, %in, a -alan.e -etween s2<<orting
t0e ,o3esti. 7ertiliKer in,2str@ an, 3eeting ex<ort .o33it3ents
t0at is -ase, on e.ono3i. Bal2e an, w0i.0 restores En,onesias
re<2tation as a relia-le C4& s2<<lier
+ttp!EE,,,5)se3.ass*ja:arta5or/EeconELNGOreports5+t3l
Donggi LNG Terminal in Trouble as
ndonesian Government !nnoun"es
Gas Suppl# Diversion
$% &un '%
Indonesia's vice-president Jusuf Kalla has announced that gas production from the
Senoro and Matindok fields will be allocated for the domestic market, undermining plans
for the Donggi-Senoro !" e#port terminal$
(S Global
nsight
)erspe"tive

Signifi"an"eT+e /o9ern3ent-s decision ,ill si/ni1icantl* s+i1t rates-o1-ret)rn on t+e
Con//i ter3inal and is t+ere1ore li:el* to )nder3ine 7its).is+i-s
interest in t+e project5 T+e &apanese co3pan* entered into t+e project
,it+ t+e )nderstandin/ t+at =00F o1 LNG o)tp)t ,o)ld .e e2ported5
mpli"ations J+ile project partner 7edco <ner/i is still interested in t+e project
#per+aps d)e to t+e recentl* ne/otiated rises in 1eed /as prices 1ro3
1ields in ,+ic+ it +as a sta:e% t+e /o9ern3ent-s decision co)ld ca)se
7its).is+i to reconsider its participation in t+e project, per+aps leadin/
t+e co3pan* to red)ce its sta:e or in t+e ,orst case scenario ,it+dra,
co3pletel*5
*utloo+T+e /o9ern3ent-s decision ,ill da3a/e in9estor con1idence in
Indonesia-s LNG sector .* )nderlinin/ t+e potential 1inancial ris:s o1
co33ittin/ capital to ne, projects5 At t+e sa3e ti3e /as re-allocation
pro3ises to red)ce /as de1icits at 3an* o1 Indonesia-s 1ertiliser plants,
+elpin/ t+e /o9ern3ent-s .roader ai3 o1 e2pandin/ /as )sa/e to red)ce
Indonesia-s oil i3port dependence, and increasin/ )tiliPation o1 cleaner
1or3s o1 ener/*5
,eginning of the End for Donggi-
T+e Con//i LNG ter3inal in Indonesia +as r)n into tro).le 1ollo,in/ t+e anno)nce3ent
.* 9ice-president B)s)1 'alla t+at nat)ral /as o)tp)t 1ro3 t+e 6enoro and 7atindo:
1ields intended to s)ppl* t+e ter3inal ,o)ld instead .e allocated to t+e do3estic 3ar:et5
KJe cannot e2port /as o9erseas, ,+ile at t+e sa3e ti3e o)r ind)str* 1aces /as s+orta/es5
Independence in ener/* is critical,K said 'alla, 0)oted .* t+e Jakarta %ost ne,spaper5
'alla also e3p+asised t+at t+e decision ,as 1inal and +ad .een ta:en collecti9el* .* t+e
/o9ern3ent and 4resident 6)silo Ba3.an/ B)d+o*ono5 ;o,e9er, NOC 4T 4erta3ina
#,+ic+ +olds a 29F sta:e in t+e LNG ter3inal project% +as ar/)ed t+at /as 1ro3 t+e t,o
1ields s+o)ld .e )sed .ot+ to s)ppl* t+e LNG plant 1or e2ports and 1or t+e do3estic
3ar:et5 4erta3ina said t+e sc+e3e ,o)ld ,or: i1 at least 2@0 33c1Ed o1 /as ,as sold
1ro3 t+e 6enoro 1ield and "@ 33c1Ed 1ro3 t+e 7atindo: 1ield at a price o1
$6A5=E33Bt), ,+ile 70 33c1Ed o1 /as co)ld .e distri.)ted to do3estic petroc+e3ical
co3panies at a price o1 $6A?5=7E33Bt)5 4artner 7edco <I4 #,+o o,ns a 20F sta:e in
t+e ter3inal project% also said t+is ,as a .etter scenario, .)t t+at t+e 1inal decision ,as )p
to t+e /o9ern3ent5 &apan-s 7its).is+i also +olds a @=F sta:e in t+e ter3inal project5
T+e /o9ern3ent-s anno)nce3ent is t+e latest pro.le3 to .eset t+e Con//i LNG ter3inal
project, castin/ do).t o9er its econo3ic 9ia.ilit*5 T+e /o9ern3ent-s decision to p)s+ )p
t+e price o1 /as 1ro3 t+e 6enoro-Con//i 1ields last 3ont+ +as alread* red)ced t+e
potential rate o1 ret)rn on in9est3ents 1or t+e ter3inal, )nder3inin/ project
econo3ics #see ndonesia: ./ 0a# .''%: ndonesian Government )ushes Gas )ri"e
(i+e for Sula1esi LNG Terminal%5 In No9e3.er 200" t+ere ,ere also do).ts o9er
,+et+er t+e /as reser9e-potential at t+e 1ields ,as s)11icient to 1eed t+e proposed
ter3inal5 Alt+o)/+ reser9es appear to +a9e since .een s+ored )p, do).ts re3ain as to
,+et+er t+e 1ields can 3eet .ot+ local de3and and LNG e2ports, as is stip)lated in
4erta3ina and 7edco-s plan #see ndonesia: 2 November .''/: Gas Reserve Stud#
)uts 3easibilit# of ndonesia4s Donggi LNG Terminal in Doubt%5 ;o,e9er, t+e
pro.le3 o1 /as allocation is per+aps t+e 3ost serio)s a11ectin/ t+e project so 1ar5 In a
,arnin/ s+ot to t+e project partners, 'alla anno)nced earlier t+is 3ont+ t+at o)tp)t 1ro3
t+e Con//i-6enoro 1ields ,o)ld .e prioritised to t+e do3estic 3ar:et5 No, t+e
/o9ern3ent-s position +as +ardened5 Accordin/ to 4latts, 'alla is see:in/ = Q 2 3illion
tE* o1 LNG 1ro3 t+e ter3inal to 1eed a proposed 1ertiliser 1actor* in so)t+-east 6)la,esi
,+ile t+e rest ,o)ld .e sold to local ind)stries in &a9a, eastern Indonesia, and ot+er
pro9inces5 Onl* a1ter t+ese cons)3ers ,ere ade0)atel* s)pplied ,o)ld LNG .e a9aila.le
1or e2port to &apan5 'alla +as 1)rt+er t+reatened to s)e an* co3pan* t+at atte3pts to
e2port LNG .e1ore 3eetin/ do3estic de3and5 T+is ,arnin/ appears to .e directed at
7its).is+i /i9en t+at it +ad si/ned +eads o1 a/ree3ents #;oA% 1or e2port o1 LNG to
&apanese )tilit* 1ir3s C+).) <lectric and 'ansai <lectric earlier t+is *ear5
$ncertainties and inconsistencies re3ain, +o,e9er, o9er t+e /o9ern3ent-s /as allocation
pro/ra33e5 In partic)lar, o9er ,+et+er nat)ral /as or LNG ,o)ld .e allocated to t+e
do3estic 3ar:et5 I1 t+e ter3inal ,o)ld s)ppl* LNG to local 1ertiliser co3panies and
ot+er do3estic )sers as 'alla is reported to +a9e said, t+is ,o)ld re0)ire si/ni1icant
in9est3ents in LNG re-/asi1ication 1acilities in Indonesia5
*utloo+ and mpli"ations
J+at i3pact is t+e /o9ern3ent-s decision li:el* to +a9e on t+e Con//i-6enoro LNG
projectG It is li:el* to 0)ite serio)sl* )nder3ine 7its).is+i-s interest in p)rs)in/ t+e
project as t+e potential re9en)es 1or s)ppl*in/ t+e do3estic 3ar:et ,it+ LNG are
considera.l* lo,er t+an 1or t+e e2port5 7its).is+i entered into t+e project ,it+ t+e
)nderstandin/ t+at =00F o1 t+e ter3inal-s o)tp)t ,as to .e e2ported, so t+e /o9ern3ent-s
anno)nce3ent is li:el* to +a9e 1)nda3entall* c+an/ed t+e project-s econo3ics5 Indeed,
t+e ter3inal-s total capacit* ,as d)e to .e 2 3illion tE*, ,+ic+ s)//ests t+at 9er* little
s)rpl)s LNG ,o)ld .e a9aila.le 1or e2port i1 t+e /o9ern3ent allocates .et,een = and 2
3illion tE* to 1ertiliser plants, ,it+ additional 9ol)3es /oin/ to local ind)stries5
7its).is+i is pro.a.l* no, ,aitin/ on t+e res)lts o1 4erta3ina and 7edco-s re0)est to
t+e /o9ern3ent to adopt a co3pro3ise sol)tion to s)ppl* .ot+ t+e do3estic and e2port
3ar:et5 ;o,e9er, 4erta3ina +as stated t+at s)ppl*in/ .ot+ 3ar:ets ,ill ca)se potential
dela*s to t+e project-s ori/inal start-)p date o1 20=2 #possi.l* d)e to t+e need 1or 1)rt+er
e2ploration at t+e /as 1ields%, ,+ic+ ,ill 3a:e t+is option less attracti9e 1or 7its).is+i5
7oreo9er, t+e date on t+e o11icial letter re0)estin/ &)s)1 'alla to reconsider /as
allocation plans ,as " &)ne and t+e /o9ern3ent +as still not so1tened its position5 I1 t+e
/o9ern3ent-s s)ppl* allocation pro/ra33e /oes a+ead, 7its).is+i is li:el* to red)ce its
sta:e in t+e project and co)ld e9en e2it t+e 9ent)re alto/et+er5 T+e /o9ern3ent +o,e9er,
appears read* 1or t+is e9ent)alit*5 T+e Antara ne,s a/enc* 0)oted 'alla as sa*in/, Kit
,ill not .e a pro.le3 ,+et+er or not #t+e &apanese in9estor% ,ill ,it+dra, its in9est3ent5
Go a+eadK5 J+ile Indonesia-s oil and /as re/)lator B47IGA6 +as said it is no, )p to t+e
project partners to deter3ine ,+et+er t+e Con//i LNG ter3inal is still 1inanciall* 9ia.le,
7edco +as reiterated its co33it3ent to t+e project5 J+et+er t+e ter3inal ,ill .e dropped
co3pletel* or not ,ill depend 1irst on ,+et+er t+e /o9ern3ent is prepared to accept a
co3pro3ise s)ppl* allocation proposal, and second on t+e projected cost o1 re-
/asi1ication 1acilities, ,+ic+ ,ill need to .e constr)cted i1 do3estic cons)3ers are to .e
s)pplied ,it+ LNG as opposed to nat)ral /as5 ;o,e9er, )nli:e 7its).is+i, .ot+
4erta3ina and 7edco <ner/i +a9e incenti9es to sta* in t+e ter3inal project d)e to t+e
recent 1eed-/as price rise 1ro3 t+e 1ields5
T+e /o9ern3ent-s decision ,ill +a9e a ne/ati9e i3pact on attractin/ in9est3ent into
Indonesia-s LNG sector5 T+e /o9ern3ent-s a.r)pt c+an/in/ o1 allocation ter3s ,it+
si/ni1icant i3plications 1or project econo3ics is da3a/in/ to in9estor con1idence5
Indeed, ot+er potential in9estors 3a* also ,orr* a.o)t 1inancial sec)rit* in s)c+ projects5
(edirectin/ e2ports to t+e c+eaper do3estic 3ar:et co)ld also lo,er /o9ern3ent re9en)e
1ro3 t+e project, pre9io)sl* esti3ated at $6A@57 .illion5 At t+e sa3e ti3e t+e
/o9ern3ent-s decision ,ill +elp red)ce c+ronic /as s+orta/es in Indonesia t+at 1orce
3an* 1ertiliser plants to 1)nction .elo, 1)ll capacit*5 T+is ,ill +a9e positi9e :noc:-on
e11ects on t+e a/ric)lt)ral sector and 1or t+e /o9ern3ent-s .roader ai3 o1 e2pandin/ /as
)sa/e to red)ce Indonesia-s oil i3port dependence and increase )tilisation o1 cleaner
1or3s o1 ener/*5
+ttp!EE,,,5/lo.alinsi/+t5co3E6CAE6CACetail=7=0=5+t3
Li0)e1ied Nat)ral Gas
7edia reports s)//est t+at Indonesia ,as s)rpassed .* 8atar in 200 as t+e sin/le lar/est
e2porter o1 LNG5
Indonesia is a leadin/ LNG e2porter5 Indonesia ,as t+e ,orldMs lar/est e2porter o1 LNG
in 200@, alt+o)/+ so3e reports s)//est t+at t+e co)ntr* ,as s)rpassed .* 8atar so3eti3e
in 2005 C)rin/ 200@, Indonesia e2ported 2? 3illion tons #77t, or =,=2? Bc1% o1 LNG,
or a.o)t = percent o1 t+e ,orld total5
Indonesia prod)ces LNG 1ro3 t,o ter3inals! t+e Bontan/ 1acilit* in Bada:, <ast
'ali3antan and t+e Ar)n plant in Nort+ 6)3atra5 T+e Bontan/ LNG ter3inal ,as
IndonesiaMs 1irst to .e/in co33ercial operations, s+ippin/ its 1irst LNG e2ports in =9775
T+e ei/+t-train Bontan/ plant is t+e lar/est LNG 1acilit* in t+e ,orld, ,it+ a capacit* to
prod)ce 2=5 77tE* #=5= Tc1E*%5 ;o,e9er, prod)ction +as stood .elo, 1)ll capacit* in
recent *ears, ,it+ 200D o)tp)t esti3ated at =95 77t #9@@ Bc1% o1 LNG5 T+e Bontan/
ter3inal is operated .* 4T Bada: NGL Co3pan*, @@ percent o,ned .* 4T 4erta3ina, 20
percent .* >ico #a B4-<ni joint 9ent)re%, =0 percent .* Total, and =@ percent .* t+e
&apan Indonesia LNG Co3pan* #&ILCO%5 (ecentl*, t+e Bontan/ plant +as 1aced
)nderprod)ction 1or a 9ariet* o1 reasons, ,+ic+ 1orced t+e Indonesian /o9ern3ent to
di9ert so3e nat)ral /as s)pplies to do3estic 1ertiliPer co3panies5 In 200@, Bontan/ LNG
s)ppl* contracts ,ere rene/otiated so t+at 3ore o1 t+e projectMs o)tp)t co)ld s)ppl*
do3estic c)sto3ers5
T+e Ar)n LNG 1acilit* is operated .* 4T Ar)n Nat)ral Gas Li0)e1action Co3pan*,
,+ic+ is @@ percent o,ned .* 4T 4erta3ina, ?0 percent .* <22on7o.il, and =@ percent
.* &ILCO5 Ar)n is a si2-train 1acilit* ,it+ a total capacit* to prod)ce 3ore t+an =0
77tE* #D"7 Bc1E*% o1 LNG, alt+o)/+ in 200D prod)ction stood at 5D 77t #?=2 Bc1%5
<22on7o.il s)pplies LNG 1or t+e Ar)n plant 1ro3 its near.* Ace+ 1ields, alt+o)/+ t+e
co3pan* esti3ates t+at it +as depleted 90 percent o1 t+e reco9era.le reser9es5 T+is
s+ort1all also contri.)ted to t+e /o9ern3entMs e11ort to redirect so3e nat)ral /as
prod)ction desi/nated 1or e2port to do3estic )sers5 In 200@, t+is 1orced t+e Indonesian
/o9ern3ent to t)rn to spot LNG 3ar:ets to 3eet its contract)al o.li/ations to 1orei/n
.)*ers5
Tan//)+ LNG 4roject
One project t+at +olds pro3ise 1or Indonesia-s 1)t)re in ,orld,ide LNG 3ar:ets is t+e
B4-led Tan//)+ project in 4ap)a pro9ince5 T+e Tan//)+ 1ields contain =D5D Tc1 o1
pro9en nat)ral /as reser9es 1o)nd ons+ore and o11s+ore t+e Jiria/ar and Bera) .loc:s5
T+e project recei9ed 1inal appro9al 1ro3 t+e /o9ern3ent o1 Indonesia in 7arc+ 200@,
and is led .* its operator B4 #?75= percent sta:e% and a consorti)3 incl)din/ t+e C+ina
National O11s+ore Oil Corporation #CNOOC, =59 percent%, 7its).is+i #=5? percent%,
Nippon Oil #=252? percent%, 'G #=0 percent%, and LNG &apan #75?@ percent%5 T+e 1irst
LNG train is set to .e/in prod)ction in 2007, ,it+ t+e second d)e 1or co3pletion .*
20095 T+e project ,ill initiall* s)ppl* D52 77tE* #20@ Bc1E*% o1 LNG, e9ent)all*
reac+in/ "5D 77tE* #D=0 Bc1E*% ,+en .ot+ trains are prod)cin/5 Accordin/ to B4, t+e
Tan//)+ LNG 1acilit* +as alread* sec)red 1o)r lon/-ter3 LNG sales contracts, incl)din/!
t+e F)jian LNG project in C+ina, '-4o,er in 'orea, 4O6CO in 'orea, and 6e3pra
<ner/* in 7e2ico5
+ttp!EE,,,5eia5doe5/o9Ee3e)Eca.sEIndonesiaENat)ralGas5+t3l
0: ND*NES!N N!T5R!L G!S 5)D!TE 3*R !)RL
S500!RY: <22on7o.il stopped prod)ction o1 nat)ral /as 1ro3 its Ar)n, 6o)t+
L+o:s):on, and 4ase /as 1ields in nort+ Ace+ on 7arc+ 9 as a res)lt o1 a deterioratin/
sec)rit* sit)ation5 T+e res)ltin/ loss o1 nat)ral /as 1eedstoc: re0)ired 4erta3ina to s+i1t
LNG deli9eries 1ro3 t+e Ar)n plant to Bontan/, IndonesiaMs second LNG plant in <ast
'ali3antan5 <arlier, Indonesia esta.lis+ed its stat)s as an e2porter o1 piped /as ,it+ a
&an)ar* =@ cere3on* 3ar:in/ 1irst deli9eries o1 nat)ral /as to 6in/apore 1ro3 its Jest
Nat)na 1ields5 4erta3ina deli9ered t+e /as in partners+ip ,it+ a consorti)3 co3prised o1
Canadian-.ased G)l1 Indonesia, $565-.ased Conoco, and $5'5-.ased 4re3ier5 Indonesia
1)rt+er ce3ented its stat)s as a piped /as e2porter ,it+ a Fe.r)ar* =2 contract si/nin/
.et,een 4erta3ina and 6in/aporeMs 6e3.corp and a 7arc+ 29 si/nin/ .et,een
4erta3ina and 7ala*sian state-o,ned petrole)3 co3pan* 4etronas5 <9en ,it+ t+ese
deals, Conoco +as a 1)rt+er @00 .illion c).ic 1eet o1 nat)ral /as reser9es a9aila.le 1ro3
its Jest Nat)na Bloc: B5 Indonesia +as ta:en 1)rt+er steps to constr)ct a nint+ LNG train
at Bontan/5 G)l1 Indonesia +as increased its capital e2pendit)re .)d/et 1or 200= .* @0
percent to $6 A=@0 3illion5 &nd summar'$
Exxon0obil Stops !"eh *nshore )rodu"tion
<22on7o.il Indonesia s)spended nat)ral /as prod)ction on 7arc+ 9 1ro3 its ons+ore
Ar)n, 6o)t+ L+o:s):on, and 4ase 1ields in nort+ Ace+ d)e to deterioratin/ sec)rit*5
Co3pan* representati9es e2plained t+at, ,+ile clas+es .et,een separatist Free Ace+
7o9e3ent #GA7% 1orces and t+e Indonesian 3ilitar* contri.)ted to an increasin/l*
ten)o)s sit)ation o9er t+e last t,o *ears, attac:s and +arass3ent ,ere increasin/l*
directed to <22on7o.il 1acilities and personnel 1ro3 &an)ar* 200=5 <22on7o.il is
en/a/ed in disc)ssions ,it+ 4erta3ina re/ardin/ res)3ption o1 its operations5
Facilities ,+ic+ depended on <22on7o.ilMs nat)ral /as and condensate s)pplies Qt+e
Ar)n LNG plant, 1ertiliPer plants 4T 4)p): Is:andar 7)da and 4T A6<AN FertiliPer,
and t+e ;)3p)s Aro3atics plant -- ,ere also 1orced drasticall* to red)ce o)tp)t or
s)spend operations5 <22on7o.il contin)es to prod)ce ?00 3illion standard c).ic 1eet o1
/as per da* 1ro3 its Nort+ 6)3atra O11s+ore #N6O% 1ield, s)11icient to 3aintain 3ini3al
sa1et* and electrical s*ste3s at its o,n operations and t+e associated 1acilities5 Jit+
Ar)nMs prod)ction red)ced to a 3ere tric:le, 4erta3ina said, o1 t+e ten car/oes co33itted
1ro3 Ar)n in 7arc+, ei/+t ,ere deli9ered 1ro3 in9entories and t+e Bontan/ LNG plant,
IndonesiaMs second plant in <ast 'ali3antan5 7ala*sia s)pplied t+e re3ainin/ t,o
car/oes5
)ertamina Delivers 3irst Gas to Singapore
4erta3ina and 6in/aporeMs 6e3.Corp Gas 4te Ltd cele.rated t+e 1irst deli9er* o1 nat)ral
/as on &an)ar* =@, e2actl* one *ear a1ter si/nin/ a /as sales a/ree3ent #G6A%5 T+e G6A
pro9ides 1or t+e s)ppl* o1 ?2@ 3illion standard c).ic 1eet per da* #33sc1d% 1ro3
IndonesiaMs Jest Nat)na 1ields to &)ron/ Island and T)as, 6in/apore 1or a period o1 22
*ears5 6e3.Gas +as a ta:e-or-pa* re0)ire3ent ,+ile 4erta3ina is o.li/ed to in9est in
speci1ied 1acilities to deli9er a 3ini3)3 o1 =2 *ears o1 /as ,+et+er or not it is
econo3ical to do so5 6ales re9en)e is projected to reac+ $6 A" .illion o9er t+e contract
ter35
T+e /as ,ill .e deli9ered 1ro3 t+ree prod)ction .loc:s Q- t+e Jest Nat)na 6ea Bloc: B,
operated .* Conoco IndonesiaR t+e 'a:ap Bloc:, operated .* G)l1 Indonesia (eso)rcesR
and Nat)na 6ea Bloc: A, operated .* 4re3ier Oil Nat)na 6ea Li3ited5 T+e t+ree
prod)ction s+arin/ contractors #46CMs%, actin/ as t+e Jest Nat)na Gro)p #JNG%,
partnered ,it+ 4erta3ina to 1or3 t+e Jest Nat)na Gas Consorti)3 #JNGC%5 JNGC
in9ested $6 A=5@ .illion to constr)ct t+e Jest Nat)na Transportation 6*ste3, a @-
:ilo3eter )nder,ater pipeline s*ste3 ,it+ si2 distinct parts and one o1 t+e lon/est
)nder,ater pipelines in t+e ,orld5 T+e pipeline +as a c)rrent capacit* o1 700 3illion
standard c).ic 1eet per da* ,it+ t+e capacit* to e2pand to one .illion standard c).ic 1eet
per da* ,it+ additional /as co3pression5
)ertamina to Export South Sumatra Gas
Indonesia and 6in/apore concl)ded anot+er /as sales a/ree3ent Fe.r)ar* =2 in ,+ic+
4erta3ina co33itted to s)ppl* nat)ral /as to Gas 6)ppl* 4te Ltd5, a 6in/apore 4o,er
s).sidiar*, 9ia a @00-:ilo3eter pipeline t+at 3)st .e operational in ?0 3ont+s5 $nder t+e
ter3s o1 t+e 20-*ear contract, 4erta3ina ,ill start sellin/ /as to 6in/apore in 3id-200? at
=@0 3illion c).ic 1eet per da* #33c1d% steppin/ )p to 2@0 33c1d .* 20095 At c)rrent
prices, t+e project ,ill /enerate $6 A9 .illion dollars in /as sales re9en)e o9er its 20-*ear
li1e, ,+ile sales o1 associated condensate and li0)e1ied petrole)3 /as #L4G% co)ld .rin/
in anot+er $6 AD .illion5 T+e /as ,ill .e s)pplied 1ro3 t+ree 1ields in 6o)t+ 6)3atra Q-
t+e &a.)n/ Bloc: operated .* 6anta Fe, a s).sidiar* o1 O:la+o3a-.ased Ce9on <ner/*
CorporationR and t+e Corridor and 6o)t+ &a3.i B Bloc:s, .ot+ operated .* G)l1
(eso)rces5 Talis3an is partnered ,it+ G)l1 in t+e Corridor Bloc:, ,+ile A3erada ;ess
and 'err-7cGee are partnered ,it+ 6anta Fe in t+e &a.)n/ Bloc:5
)ertamina and )etronas Sign Gas Suppl# !greement
4erta3ina 4resident Bai+a:i ;a:i3 si/ned a contract 7arc+ 29 ,it+ +is 7ala*sian
co)nterpart, state oil and /as co3pan* 4etronas 4resident 7o+a33ad ;assan 7arican,
to deli9er nat)ral /as 1ro3 t+e Jest Nat)na area to 7ala*sia5 $nder t+e deal, 4erta3ina
,ill s)ppl* 4etronas ,ill a total o1 =5@ trillion c).ic 1eet #TCF% o1 nat)ral /as o9er a 20-
*ear period, /eneratin/ appro2i3atel* $6 AD .illion in /as sales re9en)e 1or t+e Jest
Nat)na Bloc: B /as 1ields operated .* Conoco Indonesia5 Associated condensate and
nat)ral /as li0)ids ,ill .rin/ anot+er esti3ated AD .illion5
A s).sea pipeline ,ill deli9er /as to t+e 4etronas C)*on/ o11s+ore /as 1acilit* .* A)/)st
2002 at a rate o1 =00 3illion c).ic 1eet per da*, ra3pin/ )p to a 1)ll 9ol)3e o1 2@0
33c1d .* 20075 Conoco Indonesia #D0 percent%, &apanese 1ir3 Inpe2 #?@ percent%, and
Te2aco #2@ percent% are partnered in t+e Bloc: B prod)ction s+arin/ contract5 Conoco
and its partners ,ill spend $6 A25@ .illion to de9elop Bloc: B 1)rt+er .* constr)ctin/
3ajor prod)ction plat1or3sR a 9-:ilo3eter s).sea pipelineR a 1loatin/ prod)ction,
stora/e, and o11ta:e #F46O% 9esselR and a li0)e1ied petrole)3 /as 1acilit*5 #Note! Jest
Nat)na Bloc: B +as anot+er 05@ TCF o1 )nco33itted /as reser9es a9aila.le 1or 1)rt+er
e2ploitation in addition to t+e 4etronas and 6e3.Corp sales5%
Ninth LNG Train to be ,uilt Soon-
Indonesia +as ad9anced plans to .)ild a nint+ LNG train #train I% at t+e Bontan/ LNG
plant in <ast 'ali3antan ,it+ a re0)est 1or tec+nical .ids on a Front <nd <n/ineerin/ I
Cesi/n #F<<C% pac:a/e5 A3on/ t+e .idders are 'B( I &GC, Tec+nip I (e:a*asa
Ind)stri, C+i*oda and I'4T5 T+e <n/ineerin/, 4roc)re3ent, and Constr)ction #<4C%
tender is sc+ed)led to .e iss)ed at end o1 200=5 T+e project is e2pected to .e co3pleted
in 200D, ,it+ a desi/ned capacit* o1 ?50 3illion 3etric tons per *ear5 T+e Ar)n LNG
plantMs o)tp)t ,as declinin/ e9en .e1ore <22on7o.ilMs 7arc+ s)spension o1 /as
prod)ction5 T+e ne, train ,ill s)pport Ar)nMs e2istin/ LNG sales co33it3ents5
G)l1 Indonesia B)d/ets A=@0 7illion 1or 200=G)l1 Indonesia (eso)rces, a 72-percent-
o,ned s).sidiar* o1 G)l1 Canada (eso)rces, +as set a capital e2pendit)re .)d/et o1 $6
A=@0 3illion 1or 200=, a j)3p 1ro3 A=00 3illion in 20005 T,o-t+irds o1 t+e 200= .)d/et
e2pendit)re ,ill .e directed at de9elop3ent opport)nities and one-t+ird ,ill .e directed
to,ard e2ploration and delineation acti9ities5 O1 t+e A7@ 3illion tar/eted to,ards nat)ral
/as, "0 percent is planned 1or 6o)t+ 6)3atra /as de9elop3ent projects ,+ile 20 percent
is ear3ar:ed 1or 6o)t+ 6)3atra /as e2ploration and delineation acti9ities5 T+e A7@
3illion directed at oil ,ill .e split @0 percent 1or 6o)t+ 6)3atra oil de9elop3ent
acti9ities, D0 percent 1or o11s+ore oil e2ploration, and =0 percent 1or ot+er capital
re0)ire3ents5
+ttp!EE,,,5)se3.ass*ja:arta5or/EeconEnat/asapr0=5+t3l
2 &ul#6 .''%
3irst 7argo from ndonesia4s Tangguh LNG )ro8e"t
7its).is+i Corporation, IN4<X CO(4O(ATION, Nippon Oil Corporation, 7IT6$I I CO5,
LTC5, LNG &A4AN CO(4O(ATION, 6)3ito3o Corporation, 6ojitP Corporation and &apan Oil,
Gas I 7etals National Corporation, toda* anno)nced t+at t+e 1irst car/o o1 li0)e1ied nat)ral /as
#LNG% +as .een li1ted 1ro3 t+e B4 led Tan//)+ LNG project in 4ap)a Barat, Indonesia5 T+e
depart)re o1 t+e 1irst car/o 3ar:s t+e start-)p o1 t+e Tan//)+ project, j)st o9er 1o)r *ears a1ter its
1inal sanction .* t+e Go9ern3ent o1 Indonesia in 7arc+ 200@5
T+e 1irst car/o, on .oard t+e Tan//)+ Foja, is .o)nd 1or 4O6COMs LNG re/asi1ication ter3inal in
G,an/*an/ in 6o)t+ 'orea5
T+is s)ccess is a tri.)te to t+e close co-operation t+ro)/+o)t its de9elop3ent .et,een Tan//)+
&oint >ent)re 4artners and t+e Go9ern3ent o1 Indonesia, re/)lators, partners, contractors and
partic)larl* local co33)nities in 4ap)a5
T+e project ,ill no, 3o9e 1ro3 project de9elop3ent to t+e operations p+ase, and contin)e to
1oc)s on sa1el* and relia.l* deli9erin/ IndonesiaMs /as reso)rces to 3ar:ets across t+e ,orld 1or
decades to co3e5
Tan//)+, IndonesiaMs t+ird LNG centre a1ter Bontan/ and Ar)n, co3prises t+e de9elop3ent o1
si2 /as 1ields in t+e Jiria/ar, Bera) and 7)t)ri prod)ction s+arin/ contracts in t+e Bint)ni area
o1 4ap)a Barat in eastern Indonesia5 Gas prod)ced 1ro3 t,o nor3all* )n3anned o11s+ore
plat1or3s is 1ed 9ia 22- :ilo3etre pipelines to t,o ons+ore li0)e1action trains, eac+ ,it+ a
prod)ction capacit* o1 ?5" 3illion tonnes a *ear o1 LNG5 Train = .e/an LNG prod)ction in 3id-
&)ne, prod)cin/ t+e LNG 1or t+e 1irst car/o, and Train 2 is e2pected to co33ence t+is 0)arter5
Tan//)+ is operated .* B4 Indonesia, ,it+ a ?75= per cent interest, as a contractor to t+e
Indonesian oil and /as re/)lator, B47IGA65 Ot+er partners in t+e project are 7I Bera) B5>5
#=5? per cent%, CNOOC Ltd5 #=?59 per cent%, Nippon Oil <2ploration #Bera)% Ltd5 #=252? per
cent%, 'G Bera)E'G Jiria/ar #=0 per cent%, LNG &apan Corporation #75?@ per cent% and Talis3an
#?50 per cent%5
Notes to editors:
S T+e Tan//)+ project +as lon/ ter3 contracts in place to s)ppl* 25 3illion tonnes o1 LNG a
*ear to t+e F)jian ter3inal in C+ina, =5=@ 3illion tonnes a *ear to '-4o,er and 4O6CO
in 6o)t+ 'orea, and a 1le2i.le contract to s)ppl* )p to ?57 3illion tonnes a *ear to
6e3praMs LNG re/as ter3inal in Baja Cali1ornia, 7e2ico5
S T+e 3ain en/ineerin/ contractors 1or t+e Tan//)+ project ons+ore in1rastr)ct)re are t+e '&4
consorti)3, co3prisin/ 'ello//, Bro,n I (oot #t+ro)/+ its s).sidiar* 4T Bro,n and
(oot Indonesia%, &GC Corporation and 4T 4erta1eni::i <n/ineerin/5 Lead contractor 1or
o11s+ore and s).sea constr)ction ,as 6aipe35
S T+e Tan//)+ project +as adopted a 1)ll* inte/rated approac+ to de9elop3ent and its i3pact
on local co33)nities5 A ,ide ran/e o1 inte/rated social pro/ra33es +a9e .een
i3ple3ented, incl)din/ a co33)nit* .ased approac+ to sec)rit* and a co33it3ent to
3a2i3ise t+e e3plo*3ent opport)nities 1or local people d)rin/ .ot+ t+e constr)ction and
t+e s).se0)ent operatin/ p+ases5 Acti9ities are ta:in/ place at all le9els, 1ro3 speci1ic
pro/ra33es in t+ose 9illa/es closest to t+e project site to ,ider initiati9es across t+e
BirdMs ;ead re/ion and t+ro)/+o)t 4ap)a5
S T+e Tan//)+ 4roject +as also set ne, standards in transparenc* and +as 3ade reports 1ro3
e2ternal panels s)c+ as TIA4 and t+e <2ternal 4er1or3ance 7onitorin/ 4anel on
(esettle3ent a9aila.le to all sta:e+olders5
3urther information:
7its).is+i Corporation Corporate Co33)nications Cept5 Tel! T"=-?-?2=0-?9=7
IN4<X CO(4O(ATION Corporate Co33)nications $nit Tel! T"=-?-@@72-02??
Nippon Oil Corporation 4).lic (elations Cepart3ent Tel! T"=-?-?@02-==2D
7IT6$I I CO5, LTC5 Corporate Co33)nications Ci9ision Tel! T"=-?-?2"@-7@D0
LNG &A4AN CO(4O(ATION Corporate 4lannin/ I Coordination Cept5 Tel! T"=-?-229-?DD@
6)3ito3o Corporation Corporate Co33)nications Cept5 Tel! T"=-?-@=-?=00
6ojitP Corporation 4).lic (elations Cept5 Tel! T"=-?-@@20-2299
&apan Oil, Gas I 7etals National Corporation
4).lic (elations Ci9ision Tel! T"=-DD-@20-
+ttp!EE,,,5inpe25co5jpEen/lis+Ene,sEpd1E2009Ee20090705pd1